FFB Bancorp Reports Third Quarter 2026 Results, Highlighting 16% Year-Over-Year Core Deposit Growth and Improved Funding Mix

Deposit growth and debt retirement accompanied lower quarterly earnings and higher credit-loss provisions.

Rhea-AI Summary

FFB Bancorp (OTCQX: FFBB) reported third-quarter 2026 net income of $4.62 million, below both the previous quarter and a year earlier. Diluted earnings per share were $1.61, compared with $1.88 in the second quarter and $2.06 a year earlier. Nine-month net income fell to $14.68 million from $20.37 million.

Deposits rose 19% year over year to $1.50 billion, while loans reached $1.26 billion. Net interest income increased to $18.88 million, but credit-loss provisions rose to $2.34 million from $1.54 million sequentially. Net interest margin was 4.73%, up slightly sequentially but below 5.15% a year earlier. Non-interest expense rose 9% year over year to $15.52 million. FFB redeemed its remaining $10.00 million of long-term debt and exhausted its $15.0 million share repurchase authorization. Shareholder equity declined 4% sequentially to $176.32 million. All results are unaudited.

15 points · 0 major

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0 major · 20 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointDeposits reached $1.50 billion, up 9% sequentially and 19% year over year.
• Moderate point$10.00 million subordinated debenture redemption retired remaining long-term debt, generating an $843,000 extinguishment gain. 3.9% of market cap
• Moderate point$15.0 million buyback authorization exhausted, with 174,554 shares repurchased at an average $85.85. 5.9% of market cap
• Moderate pointLoans reached $1.26 billion, increasing $2.21 million sequentially and $140.99 million year over year.
• Moderate pointNet interest income reached $18.88 million, up $805,000 sequentially and $830,000 year over year.
• Moderate pointAssets reached $1.70 billion, up 5% sequentially and 13% year over year.

9 minor points

• Minor pointNon-interest-bearing deposits grew $80 million during the third quarter.
• Minor pointCore deposits grew 16% year over year.
• Minor pointOperating revenue reached $24.17 million, stable sequentially and up 3% year over year.
• Minor pointNonperforming assets declined 21% during the quarter.
• Minor point. Forward-looking: it has not happened yet and may not happen.$31.17 million of loans held for sale are expected to be sold in fourth-quarter 2026.
• Minor pointProfessional fees fell to $1.06 million, down 14% sequentially and 12% year over year.
• Minor pointMerchant operating expense fell to $1.24 million, versus $1.35 million sequentially and $1.58 million a year earlier.
• Minor pointISO partner sponsorship revenue rose 9.8% sequentially to $1.46 million.
• Minor point. Forward-looking: it has not happened yet and may not happen.FFB expects customer and ISO partner deposits to increase, potentially reducing wholesale funding reliance in fourth-quarter 2026.

Negative

• Moderate pointQuarterly net income fell to $4.62 million, versus $5.48 million sequentially and $6.24 million a year earlier.
• Moderate pointCredit-loss provisions rose to $2.34 million, versus $1.54 million sequentially and $687,000 a year earlier.
• Moderate pointShareholder equity declined to $176.32 million, down 4% sequentially and 2% year over year.
• Moderate pointNet interest margin was 4.73%, down 42 basis points annually despite a 2-basis-point sequential increase.
• Moderate pointNon-interest income fell to $5.28 million, versus $5.97 million sequentially and $5.44 million a year earlier.
• Moderate pointMerchant services revenue fell to $2.72 million, down 7% sequentially and 15% year over year.
• Moderate pointSalary and benefit expense rose to $9.05 million, up 9% sequentially and 18% year over year.
• Moderate pointEfficiency ratio worsened to 64.19%, versus 62.20% sequentially and 60.76% a year earlier.
• Moderate pointReturn on average equity fell to 10.00%, versus 11.99% sequentially and 14.13% a year earlier.
• Moderate pointReturn on average assets fell to 1.10%, versus 1.35% sequentially and 1.67% a year earlier.

10 minor points

• Minor pointDiluted EPS fell to $1.61, versus $1.88 sequentially and $2.06 a year earlier.
• Minor pointNine-month net income fell to $14.68 million, versus $20.37 million; diluted EPS declined to $5.02 from $6.57.
• Minor pointBook value per share was $61.95, down 3% sequentially but up 4% year over year.
• Minor pointFunding cost was 1.28%, stable sequentially but 15 basis points higher year over year.
• Minor pointLoan-sale gains fell to $136,000, versus $1.37 million sequentially and $361,000 a year earlier.
• Minor pointNet merchant services income fell to $1.476 million, versus $1.559 million sequentially and $1.629 million a year earlier.
• Minor pointDeposit fee income was $937,000, down 7% sequentially but up 15% year over year.
• Minor pointOccupancy and equipment expenses increased 2% sequentially and 8% year over year.
• Minor pointData and technology expense was $1.61 million, up 7% annually despite a 1% sequential decline.
• Minor pointOther operating expense rose to $2.06 million, up $116,000 sequentially and 11% year over year.

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FRESNO, Calif., Oct. 27, 2026 (GLOBE NEWSWIRE) -- FFB Bancorp (the “Company”) (OTCQX: FFBB), the parent company of FFB Bank (the “Bank”), today reported net income of $4.62 million, or $1.61 per diluted share, for the third quarter of 2026, compared to $5.48 million, or $1.88 per diluted share, for the second quarter of 2026, and $6.24 million, or $2.06 per diluted share, for the third quarter of 2025.

For the nine months ended September 30, 2026, net income was $14.68 million, or $5.02 per diluted share, compared to $20.37 million, or $6.57 per diluted share, for the same period in 2025. All results are unaudited.

Third Quarter 2026 Summary: As of, or for the quarter ended September 30, 2026, compared to the quarters ended June 30, 2026, and September 30, 2025, respectively:

• Total assets increased 5% to $1.70 billion from the previous quarter and increased 13% when compared to the same quarter of the prior year.
• Total portfolio of loans increased $2.21 million to $1.26 billion from the previous quarter and increased $140.99 million when compared to the same quarter for the prior year. For the quarter ended September 30, 2026 there were $31.17 million in loans held for sale that are expected to be sold in the fourth quarter of 2026.
• Total deposits increased 9% to $1.50 billion from the previous quarter and increased 19% when compared to the same quarter of the prior year.
• Shareholder equity decreased 4% to $176.32 million from the previous quarter's $182.78 million and decreased 2% when compared to the same quarter for the prior year.
• Redeemed in full $10.00 million principal amount of subordinated debentures retiring the Company's remaining long-term debt.
• Book value per common share decreased 3% to $61.95, from $63.80 in the previous quarter, and increased 4% from $59.84 in the same quarter of the prior year.
• Operating revenue (net interest income, before the provision for credit losses, plus non-interest income) remained stable at $24.17 million with the previous quarter and increased 3% when compared to the same quarter of the prior year.
• Net interest margin increased 2 basis points to 4.73% from the previous quarter and decreased 42 basis points when compared to the same quarter of the prior year.
• Provision for credit loss increased to $2.34 million from $1.54 million in the previous quarter and increased from $687,000 in the same quarter of the prior year.
• Return on average equity (“ROAE”) was 10.00%, compared to 11.99% in the previous quarter and 14.13% in the same quarter of the prior year.
• Return on average assets (“ROAA”) was 1.10%, compared to 1.35% in the previous quarter and 1.67% in the same quarter of the prior year.
• The Company’s tangible common equity ratio was 10.39%, while the Bank’s regulatory leverage capital ratio was 11.55%, and the total risk-based capital ratio was 15.91% at September 30, 2026.

"During the quarter we've continued to see positive momentum on the matters outlined in our consent order. While final determination rests with our regulators, we expect the substantial investments we've made in risk management, compliance, and operational infrastructure to further support our long-term growth strategy."

“Our third quarter results reflect meaningful progress in strengthening the balance sheet while continuing to address credit-related challenges. Deposits increased $119 million during the quarter, including $80 million of growth in non-interest bearing balances, net interest income increased 4% sequentially, and nonperforming assets declined 21%," said Steve Miller, President & CEO. "Although elevated charge-offs and provision expense affected current-quarter earnings, the growth in core funding and improvement in liquidity, was very encouraging for the team to realize and will provide a stronger foundation for future earnings."

Update on Stock Repurchase Program:

On January 26, 2026, the Company announced that it had authorized a plan to utilize up to $15.0 million of capital to repurchase shares of the Company’s common stock. As of September 30, 2026, the Company had repurchased 174,554 shares, at an average price of $85.85, fully exhausting the authorized plan. The total cost of these repurchases represented approximately 8.50% of total shareholders' equity at September 30, 2026. During the third quarter of 2026 the Company repurchased 20,210 shares, at an average price of $87.10, totaling $1.76 million. These purchases represented approximately 1.00% of total shareholders' equity at September 30, 2026.

Results of Operations

Quarter ended September 30, 2026:

Operating revenue, consisting of net interest income before the provision for credit losses and non-interest income, remained stable at $24.17 million for the third quarter of 2026, compared to $24.05 million for the second quarter of 2026, and increased 3% compared to $23.49 million for the third quarter a year ago. The quarter over quarter increase in operating revenue for the third quarter of 2026 was primarily the result of increases in loan and interest income on cash held overnight, partially offset by an increase in interest expense and decreases in the gain on sale of loans and merchant services income. The increase from the third quarter a year ago was primarily the result of an increase in loan, investment, and overnight fed funds income.

Net interest income, before the provision for credit losses, increased $805,000 to $18.88 million for the third quarter of 2026, from $18.08 million recorded in the last quarter, and increased $830,000 when compared to $18.05 million recorded in the same quarter a year ago. The Company’s net interest margin (“NIM”) increased 2 basis points to 4.73% for the third quarter of 2026, compared to 4.71% for the prior quarter, and decreased by 42 basis points from 5.15% for the third quarter of 2025. The decrease in NIM from the third quarter of 2025 was driven by changes in funding mix, including an increase in the reliance on wholesale funding.

The yield on earning assets was 6.02% for the third quarter of 2026, compared to 6.00% for the previous quarter, and 6.28% for the third quarter a year ago. The cost to fund earning assets remained stable at 1.28% for the third quarter of 2026 compared to the previous quarter, and increased 15 basis points from the 1.13% in the same quarter a year earlier. "The increase in the cost to fund earnings assets from the same quarter a year earlier was primarily the result of an increased reliance on wholesale funding due to the bank achieving strong loan production over that period but lagging its planned core deposit growth," said Bhavneet Gill, EVP & Chief Financial Officer. "Looking ahead, our priorities are continuing to increase core deposits, reduce wholesale funding dependence over the next several quarters, and realize the benefits of recent loan growth, which positions margin performance to improve over time." Wholesale funding carried a weighted average rate of 3.95% for the third and second quarters of 2026. Management anticipates deposits for Bank customers and ISO partners to increase over the remainder of the year, which could allow some reduction in reliance on wholesale funding during the fourth quarter.

Total non-interest income was $5.28 million for the third quarter of 2026, compared to $5.97 million for the previous quarter, and $5.44 million for the third quarter of 2025. The decrease in non-interest income, compared to the second quarter of 2026, was primarily driven by decreases in merchant services income and gain on sale of loans revenue. Non-interest income for the third quarter of 2026 includes a $843,000 gain on extinguishment of the Company's remaining $10.00 million subordinated debenture. There was a $136,000 gain on the sale of loans during the third quarter of 2026, compared to a gain on the sale of loans of $1.37 million in the previous quarter, and a gain on the sale of loans of $361,000 during the third quarter 2025. The gain on the sale of loans during the quarter was the result of $3.15 million in SBA loan sales that were completed during the quarter. For the second quarter of 2026 the gain on the sale of loans was the result of $6.02 million in SBA, $60.71 million in multifamily, and $5.94 million in USDA loan sales.

Merchant services revenue decreased 7% to $2.72 million when compared to the second quarter of 2026 and decreased 15% from $3.21 million when compared to the third quarter of 2025. The decrease over prior year was attributed to a reduction in ISO partner sponsorship volumes, and the reduction in FFB Payments revenue due to pricing competition. The decrease in merchant services revenue over the prior quarter was primarily driven by lower processing volumes and associated revenue for FFB Payments. ISO partner sponsorship revenue increased 9.8% to $1.46 million during the third quarter of 2026 compared to the previous quarter.

Merchant ISO Processing Volumes(in thousands)
Source	Q3 2026		Q2 2026		Q1 2026		Q4 2025		Q3 2025
ISO Partner Sponsorship	$	2,840,252	$	2,877,437	$	2,477,113	$	2,773,101	$	3,099,287
FFB Payments - Sub-ISO Merchants		16,787		22,165		28,520		21,679		19,023
FFB Payments - Direct Merchants		33,169		34,368		19,587		26,347		28,573
Total volume	$	2,890,208	$	2,933,970	$	2,525,220	$	2,821,127	$	3,146,883

Merchant ISO Processing Revenues(in thousands)
Source of Revenue	Q3 2026			Q2 2026		Q1 2026			Q4 2025			Q3 2025
Net Revenue*:
ISO Partner Sponsorship	$	1,462		$	1,332	$	1,188		$	1,339		$	1,937
Gross Revenue:
FFB Payments - Sub-ISO Merchants		549			793		684			726			633
FFB Payments - Direct Merchants		705			780		624			580			640
		1,254			1,573		1,308			1,306			1,273
Gross Expense:
FFB Payments - Sub-ISO Merchants		619			689		724			883			780
FFB Payments - Direct Merchants		621			657		593			720			801
		1,240			1,346		1,317			1,603			1,581
Net Revenue:
FFB Payments - Sub-ISO Merchants		(70	)		104		(40	)		(157	)		(147	)
FFB Payments - Direct Merchants		84			123		31			(140	)		(161	)
FFB Payments Net Revenue		14			227		(9	)		(297	)		(308	)
Net Merchant Services Income:	$	1,476		$	1,559	$	1,179		$	1,042		$	1,629

*ISO Partner Sponsorship is recognized net of expense in Merchant Services Income. FFB Payments revenues are recognized on a gross basis in Merchant Services Income and Merchant Services expenses are recognized in Non-Interest Expense.

Overall, total merchant services revenue for the third quarter of 2026, net of merchant services operating expense, decreased 5% when compared to the second quarter of 2026.

Total deposit fee income decreased 7% to $937,000 for the third quarter of 2026 from the $1.00 million recorded in the previous quarter and increased 15% from the $812,000 recorded in the third quarter of 2025. The decrease in the current quarter is primarily driven by $68,000 in foreign wire revenue compared to $153,000 recorded during the previous quarter.

Non-interest expense increased 4% to $15.52 million for the third quarter of 2026, compared to $14.96 million from the previous quarter, and increased 9%, compared to the $14.27 million recorded for the third quarter 2025. The increase on a year-over-year comparison was driven by increases in salary and employee benefit expense, partially offset by decreases in merchant services operating expenses and professional fees. Compared to the second quarter of 2026, the increase in non-interest expense was attributed to increases in salaries and employee benefit expense and other operating expenses, partially offset by a decrease in professional fees.

Salaries and employee benefits increased 18% to $9.05 million for the third quarter of 2026, compared to $7.67 million for the third quarter 2025. The increase year-over-year was primarily the result of expense associated with the increase in full-time employees. Full-time employees increased to 197 at September 30, 2026, compared to 180 full-time employees a year earlier. Total salaries and employee benefits increased 9% from $8.34 million in the previous quarter. The quarterly increase in salaries and employee benefits expense was primarily due to a $750,000 increase in incentive compensation payouts and accrued performance bonus expense.

Occupancy and equipment expenses increased 8% from a year ago, representing 3% of non-interest expense, and increased 2% from the previous quarter. These increases year-over-year are the result of increases in rent and other expenses related to office expansion.

Merchant operating expense totaled $1.24 million for the third quarter of 2026, compared to $1.58 million for the third quarter of 2025 and $1.35 million for the previous quarter. The decrease in merchant operating expense, compared to the third quarter of 2025, is attributed to fluctuations in volume and revenue for the FFB Payments lines of business. Merchant operating expenses include interchange fees, chargebacks, partnership fees, and other card brand fees.

Professional fees, which consist of legal, audit, and consulting expenses, were $1.06 million for the third quarter of 2026, representing a decrease of 14% from $1.23 million in the previous quarter and a decrease of 12% when compared to the $1.20 million recorded in the third quarter 2025. Professional fees were elevated in the second quarter 2026 due to legal and consulting expenses related to new products and services. Professional fees for the third quarter of 2025 included non-recurring legal and consulting expenses related to consent order remediation.

Data and technology expenses increased 7% to $1.61 million for the third quarter of 2026, compared to $1.51 million for the third quarter 2025, and decreased 1% from the $1.62 million recorded in the previous quarter. The increase in data and technology expense year over year is primarily due to new products and services and enhancements to the Company's AML/CFT, compliance, and merchant services programs. “Our strategy continues to be focused on maximizing existing systems while selectively deploying AI and automation to improve productivity and avoid unnecessary headcount growth. Although AI has proven to potentially replace some of our existing software expense, AI itself is also quite expensive to tend and care for when you factor in a bank grade risk and control environment,” said Miller. “Our priority is ensuring our teams are supported through these changes while driving higher‑quality, more efficient outcomes.”

Other operating expense increased 11%, or $210,000, to $2.06 million from a year earlier and increased $116,000 from the previous quarter. The quarterly increase was primarily the result of recoveries of operating losses totaling $120,000 recorded during the second quarter of 2026.

The efficiency ratio was 64.19% for the third quarter of 2026, compared to 60.76% for the same quarter a year ago, and 62.20% for the previous quarter, which is primarily the result of changes in other operating expenses. This ratio can also fluctuate period-over-period based on changes in merchant services' gross revenues and associated expenses. In addition to the primary efficiency ratio, the Company also calculates an adjusted efficiency ratio, a non-GAAP measure, where merchant services' gross expense is netted against merchant services' revenue in non-interest income. This expense would traditionally be included in non-interest expense. The adjusted efficiency ratio was 62.26% for the third quarter of 2026, compared to 57.93% for the same quarter a year ago, and 59.96% for the previous quarter. “We are making intentional investments in technology, talent, and products to position the Company for sustainable balance sheet growth and higher recurring revenue. While these actions impact the efficiency ratio in the near term, we expect operating leverage to improve as growth accelerates over the next several quarters,” said Miller.

Nine months ended September 30, 2026:

For the nine months ended September 30, 2026, operating revenue decreased 10% to $71.16 million, compared to $79.32 million for the same period in 2025. For the nine months ended September 30, 2026, net interest income before the provision for credit losses decreased $274,000 to $54.79 million, compared to $55.06 million for the same period in 2025. These decreases in revenue are attributed to increases in interest bearing liabilities and cost of funds, though partially offset by the growth in the loan portfolio. For the nine months ended September 30, 2026, the yield on earning assets was 6.04% compared to 6.26% for the same period in 2025, while the cost to fund earning assets was 1.26% for the nine months ended September 30, 2026, compared to 1.06% for the same period in 2025.

For the nine months ended September 30, 2026, non-interest income decreased 33% to $16.37 million compared to $24.26 million for the same period in 2025. The year-over-year decrease in non-interest income is primarily attributed to the decrease of merchant services income; the result of strategic ISO partner exits that occurred in 2025. This decrease was partially offset by increases in the gains recorded on the sale of loans, deposit fee income, and other operating income.

For the nine months ended September 30, 2026, operating expenses remained stable at $46.48 million compared to $46.51 million for the same period in 2025. Salaries and employee benefits expense increased 11% to $26.39 million as a result of the increase in FTE. Other operating expenses decreased 4% to $6.37 million due to lower operating losses. There was a 49% decrease in merchant services operating expenses, driven by the decrease in processing volumes, to $3.93 million, which represents 8% of total operating expenses for the nine months ended September 30, 2026.

For the nine months ended September 30, 2026, the efficiency ratio was 65.36%, compared to 58.46% for the same period ended September 30, 2025. The adjusted efficiency ratio, a non-GAAP measure, where merchant services' gross expense is netted against merchant services' revenue in non-interest income, was 63.34%, compared to 54.04% for the same period ended September 30, 2025.

Balance Sheet Review

Total assets increased 13% to $1.70 billion at September 30, 2026, compared to $1.50 billion at September 30, 2025, and increased 5% compared to $1.62 billion at June 30, 2026.

The total loan portfolio increased 13%, or $140.99 million, to $1.26 billion, compared to $1.12 billion at September 30, 2025, and remained consistent with the $1.26 billion reported at June 30, 2026. "Loan demand and production remained healthy during the quarter, even though period-end portfolio balances were affected by loan sales, payoffs, and the transfer of certain loans to held for sale," said Miller. "During 2026 we approved total commitments of $370 million while also selling over $103 million of loans, demonstrating the depth of our pipeline. Looking ahead, our focus will be to maintain quality asset growth while continuing to improve funding mix, like we saw during the current quarter, which will enable us to convert recent balance sheet growth into stronger recurring earnings."

Commercial real estate loans decreased 2% year-over-year to $698.40 million, representing 55% of total loans at September 30, 2026. The decrease in CRE loan balances was driven by payoffs of short-term bridge loans and reclassification of $22.40 million in loans from held-for-investment to held-for-sale. The CRE portfolio includes $27.80 million in short-term bridge loans for transitional projects of multifamily properties. The short-term bridge loans are conservatively underwritten with minimum DSCR and liquidity requirements.

The real estate construction and land development loan portfolio increased 106% from a year ago to $35.75 million, representing 3% of total loans, while residential RE 1-4 family loans totaled $44.80 million, or 4% of loans, at September 30, 2026, compared to $20.36 million one year ago. Real estate construction and land development lending balances may fluctuate between periods as projects complete and development activity expands.

The commercial and industrial (C&I) portfolio increased 18% to $312.30 million, at September 30, 2026, compared to $264.69 million a year earlier, and increased 4% from $300.53 million at June 30, 2026. C&I loans represented 25% of total loans at September 30, 2026.

Agriculture loans increased 6% to $109.82 million, at September 30, 2026, compared to $103.98 million a year earlier, and decreased 6% from $116.96 million at June 30, 2026. Agriculture loans represented 9% of the loan portfolio at September 30, 2026. At September 30, 2026, the SBA, USDA, and other government agencies guaranteed loans totaled $59.51 million, or 5% of the loan portfolio.

Investment securities totaled $227.81 million at September 30, 2026, compared to $248.28 million a year earlier, and decreased $33.10 million from $260.91 million at June 30, 2026. At September 30, 2026, the Company had a net unrealized loss position on its investment securities portfolio of $31.88 million, compared to $20.37 million a year earlier, and $17.99 million at June 30, 2026. The Company’s investment securities portfolio had an effective duration of 6.16 years at September 30, 2026, compared to 6.17 years at September 30, 2025, and 6.15 years at June 30, 2026. The increase in the Company's net unrealized loss position is the result of increases in market rates.

Total deposits increased 19%, or $245.34 million, to $1.50 billion at September 30, 2026, compared to $1.26 billion from a year earlier, and increased 9% from $1.38 billion when compared to June 30, 2026. Non-interest bearing demand deposits increased 6% to $806.37 million at September 30, 2026, compared to $758.24 million at September 30, 2025, and increased 11% from $726.64 million at June 30, 2026. Non-interest bearing demand deposits represented 54% of total deposits at September 30, 2026. Certificates of deposits decreased 3%, or $5.16 million, during the quarter. Wholesale deposits, which consist of brokered CDs and ICS one-way buy deposits, as a percentage of total deposits was 10.42% at September 30, 2026 and 11.32% at June 30, 2026, compared to 7.55% from a year earlier. Management intends to reduce wholesale deposit reliance over the next several quarters through growth in Bank core customers and the expansion of existing ISO partner relationships.

Included in total non-interest bearing deposits at September 30, 2026 are $72.23 million from ISO partners for merchant reserves, $11.82 million from ISO partners for settlement, and $14.65 million in ISO partner operating accounts, totaling $98.70 million. These deposits represent 12% of non-interest bearing deposits and 7% of total deposits. At September 30, 2025 there was $79.89 million from ISO partners for merchant reserves, $18.91 million from ISO partners for settlement, and $13.11 million in ISO partner operating accounts, totaling $111.91 million or 15% of non-interest bearing deposits and 9% of total deposits. These decreases were the result of strategic ISO partner exits completed during 2025.

The Company's regional loan production office ("LPO") expanded in 2026 by adding a receivables financing team which utilizes a third party platform, Business Manager, to efficiently manage this unique business line. The Business Manager product line is led by a senior business leader and a support team acquired late in 2025. They have a nationwide approach while also supporting the core bank commercial lenders in cross-selling this product. To date the Bank has approved $95.20 million in loan commitments, an increase of $11.45 million over the previous quarter, with average utilization of 43%. This business line anticipates growing corresponding deposit reserves to an average of 30% of the loan balances.

We organize our loan and deposit operations into three geographic regions in California. The regions are represented by two regional heads in the Central Valley, one in Northern California, and one in Southern California. Loan and deposit totals by region or business line had the following balances as of September 30, 2026:

Balances by Region or Business Line as of September 30, 2026 (in thousands)
	Loans				Deposits
Central California	$	815,460		Central California	$	1,075,019
Northern California		22,401		Northern California		34,861
Southern California		134,612		Southern California		131,408
Wholesale Multifamily		167,423		Wholesale Funding		158,884
SBA		123,016		Merchant Services		103,431
Total	$	1,262,912		Total	$	1,503,603

There were no short-term borrowings at September 30, 2026, compared to $25.00 million at June 30, 2026, and $7.00 million at September 30, 2025. The Company primarily utilizes FHLB advances and the Federal Reserve discount window for short-term borrowings. The following table summarizes the Company's primary and secondary sources of liquidity which were available at September 30, 2026:

Liquidity Source(in thousands)	September 30, 2026		June 30, 2026
Cash and cash equivalents	$	115,669	$	47,457
Unpledged investment securities, fair value		11,421		23,231
FHLB advance capacity		270,930		352,774
Federal Reserve discount window capacity		427,814		148,288
Correspondent bank unsecured lines of credit		71,500		71,500
	$	897,334	$	643,250

The total primary and secondary liquidity of $897.33 million at September 30, 2026 represents an increase of $254.08 million in primary and secondary liquidity quarter-over-quarter. This increase was primarily driven by increased pledging at the Federal Reserve discount window. "During the quarter we increased available liquidity to approximately $897.33 million, eliminated short-term borrowings, and retired the remaining $10.00 million of subordinated debt. Combined with regulatory capital ratios that remain above well-capitalized thresholds, we believe the balance sheet is positioned to provide meaningful flexibility to support customers, manage credit resolution, and fund future growth," added Gill.

Shareholders’ equity decreased 2% to $176.32 million at September 30, 2026, compared to $179.42 million from a year ago, and decreased 4% compared to the $182.78 million reported at June 30, 2026. Book value per common share increased 4% to $61.95, at September 30, 2026, compared to $59.84 at September 30, 2025, and decreased 3% from $63.80 at June 30, 2026. The decreases in these figures for the current period are the result of the increase in the net unrealized loss reported at September 30, 2026. The tangible common equity ratio was 10.39% at September 30, 2026, compared to 11.97% a year earlier, and 11.30% at June 30, 2026.

At the Bank level, unrealized losses and gains reflected in accumulated other comprehensive loss are not included in regulatory capital. As a result, Tier-1 capital at the Bank for regulatory purposes was $194.44 million at quarter end excluding the unrealized loss. The regulatory leverage capital ratio was 11.55% for the current quarter, while the total risk-based capital ratio was 15.91%, exceeding regulatory minimums to be considered well-capitalized.

Asset Quality

Nonperforming assets, which consist of nonperforming loans and other real estate owned, decreased 20.53% to $35.16 million, or 2.07% of total assets, at September 30, 2026, compared to $44.24 million, or 2.74% of total assets, from the previous quarter. "Nonperforming assets declined 20.53% during the quarter. Of the $35.16 million in remaining nonperforming loans, $24.30 million or 69.11% is covered by SBA guarantees, leaving $10.86 million in potential exposure, of which 35.31% is secured by real estate," added Miller. "While we remain focused on resolution efforts, we are encouraged by the reduction in problem assets and believe the remaining exposure is manageable relative to our capital position and reserve levels." Total delinquent loans increased to $6.48 million at September 30, 2026, compared to $2.97 million at June 30, 2026. This increase is the result of the migration of certain SBA relationships.

Non-Accrual Loan Summary	Total		Govt. Guaranteed Amount		Unguaranteed Amount		Individual Allowance (ACL)
(in thousands)
Loan Type
Commercial and industrial	$	24,956	$	17,909	$	7,047	$	2,779
Commercial real estate:
CRE owner-occupied		10,201		6,387		3,814		218
	$	35,157	$	24,296	$	10,861	$	2,997

Past due accruing loans 30-59 days were $6.30 million at September 30, 2026, compared to $2.68 million at June 30, 2026, and $6.21 million at September 30, 2025. There were $138,000 in past due accruing loans from 60-89 days at September 30, 2026, compared to $59,000 at June 30, 2026, and $355,000 in past due accruing loans from 60-90 days a year earlier. Past due accruing loans 90+ days at quarter end totaled $45,000 at September 30, 2026, compared to $231,000 at June 30, 2026, and $966,000 at September 30, 2025.

Of the $6.48 million in past due accruing loans at September 30, 2026, $3.78 million include government guarantees, which are guaranteed by the SBA for 75% - 100% of the full payment of the principal plus interest.

Delinquent Loan Summary	Delinquent accruing loans 30-59 days		Delinquent accruing loans 60-89 days		Delinquent accruing loans 90+ days		Total		Govt. Guaranteed Amount		Unguaranteed Amount
(in thousands)
Loan type
Commercial and industrial	$	5,539	$	138	$	45	$	5,722	$	3,780	$	1,942
Commercial real estate:
CRE owner-occupied		756		—		—		756		—		756
	$	6,295	$	138	$	45	$	6,478	$	3,780	$	2,698

There was a $2.34 million provision for credit losses in the third quarter of 2026, compared to $687,000 provision for credit losses in the third quarter a year ago, and a $1.54 million provision for credit losses recorded in the second quarter of 2026. The provision recorded in the third quarter of 2026 primarily reflects portfolio segment growth and $750,000 in charge-offs exceeding the specific reserves established for two multifamily loans sold during the quarter.

The ratio of allowance for credit losses to total loans was 1.05% at September 30, 2026 and 1.40% at June 30, 2026. The decrease in this ratio is the result of the reduction in total individual allowance through collateral improvements and the charge-offs recorded during the quarter. The ratio of allowance for credit losses to the total, non-guaranteed, loan portfolio was 1.11%, as of September 30, 2026 compared to 1.47% at June 30, 2026. As of September 30, 2026 the total non-guaranteed exposure of the SBA loan portfolio was $45.87 million, consisting of 239 loans.

"During the quarter we incurred net charge-offs of $6.41 million, compared to $1.28 million in net charge-offs in the previous quarter. Although charge-offs were elevated, they were largely concentrated in previously identified problem credits that had already been substantially reserved in prior quarters. These included multifamily loans and unsecured small-business loans, and the unguaranteed portions of SBA loans,” added Miller. “We have consistently expressed our concerns about the SBA portfolio performance due to market conditions over the last several years. As a result, we have centralized collections and special assets management, refined underwriting standards in selected SBA verticals, and incorporated lessons from prior losses into our credit-management process. Our near-term priorities are to maximize recoveries, limit migration, and continue reducing criticized and nonperforming assets.”

About FFB Bancorp

FFB Bancorp, formerly Communities First Financial Corporation, a bank holding company established in 2014, is the parent company of FFB Bank, founded in 2005 in Fresno, California. As a leading SBA Lender in California’s Central Valley and one of the few direct acquiring banks in the United States, FFB Bank offers clients a range of personal and business checking accounts, payment processing services, and loan programs. Among the Bank’s awards and accomplishments, it was ranked #1 on American Banker’s list of the Top 20 Publicly Traded Banks under $2 Billion in Assets for 2024. The Bank was also ranked by S&P Global in 2025 as the #34 best performing US community bank under $3 billion in assets. The Company has also received recognition as part of the OTCQX Best 50 Companies for 2019, 2023, and 2024. For additional information, you can visit the Company’s website at www.ffb.bank or by contacting a representative at 559-439-0200.

Forward Looking Statements

This earnings release may contain forward-looking statements. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation, the Company’s ability to effectively execute its business plans; the impact of the Consent Order on our financial condition and results of operations; changes in general economic and financial market conditions; changes in interest rates, and in particular, actions taken by the Federal Reserve to try and control inflation; changes in the competitive environment; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; losses, customer bankruptcy, claims and assessments; changes in banking regulations or other regulatory or legislative requirements affecting the Company’s business; international developments; the tariff strategy of the Trump administration, and its related effects on the agriculture industry and connected businesses in the Central Valley; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. The Company undertakes no obligation to release publicly the results of any revisions to the forward-looking statements included herein to reflect events or circumstances after today, or to reflect the occurrence of unanticipated events. The Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

                                                                                              Member FDIC

Select Financial Information and Ratios (in thousands, except per-share data, ratios, and employee counts)	For the Quarter Ended:												Year to Date as of:
	September 30, 2026				June 30, 2026				September 30, 2025				September 30, 2026				September 30, 2025
BALANCE SHEET- ENDING BALANCES:
Total assets	$	1,697,196			$	1,617,413			$	1,499,233
Total portfolio loans		1,262,912				1,260,702				1,121,924
Investment securities		227,811				260,911				248,282
Total deposits		1,503,603				1,384,586				1,258,261
Shareholders equity, net		176,320				182,784				179,424
INCOME STATEMENT DATA
Operating revenue		24,168				24,053				23,492				71,158				79,318
Operating expense		15,515				14,961				14,273				46,477				46,508
Pre-tax, pre-provision income		8,653				9,092				9,219				24,681				32,810
Net income after tax		4,616				5,477				6,236				14,677				20,370
SHARE DATA
Basic earnings per share	$	1.62			$	1.89			$	2.07			$	5.04			$	6.58
Fully diluted EPS	$	1.61			$	1.88			$	2.06			$	5.02			$	6.57
Book value per common share	$	61.95			$	63.80			$	59.84
Common shares outstanding		2,846,314				2,864,926				2,998,254
Fully diluted shares		2,863,585				2,912,210				3,025,332				2,924,751				3,100,992
FFBB - Stock price	$	88.45			$	85.75			$	81.45
RATIOS
Return on average assets		1.10%				1.35%				1.67%				1.21%				1.80%
Return on average equity		10.00%				11.99%				14.13%				10.63%				15.55%
Efficiency ratio		64.19%				62.20%				60.76%				65.36%				58.46%
Adjusted efficiency ratio		62.26%				59.96%				57.93%				63.34%				54.04%
Yield on earning assets		6.02%				6.00%				6.28%				6.04%				6.26%
Yield on investment securities		3.81%				3.72%				3.79%				3.68%				4.11%
Yield on portfolio loans		6.55%				6.56%				6.76%				6.55%				6.75%
Cost to fund earning assets		1.28%				1.28%				1.13%				1.26%				1.06%
Cost of interest-bearing deposits		2.99%				2.90%				2.83%				2.91%				2.75%
Net Interest Margin		4.73%				4.71%				5.15%				4.78%				5.20%
Equity to assets		10.39%				11.30%				11.97%
Net loan to deposit ratio		85.06%				89.54%				89.55%
Full time equivalent employees		197				191				180
BALANCE SHEET- AVERAGES
Total assets		1,670,909				1,624,113				1,480,234				1,618,026				1,512,281
Total portfolio loans		1,277,633				1,252,046				1,120,353				1,248,722				1,103,353
Investment securities		250,267				252,879				251,213				247,973				288,407
Total deposits		1,460,550				1,410,161				1,244,569				1,400,289				1,275,286
Shareholders equity, net		183,176				183,148				175,101				184,516				175,198

Consolidated Balance Sheet (unaudited)	September 30, 2026				June 30, 2026				September 30, 2025
(in thousands)
ASSETS
Cash and due from banks	$	31,490			$	31,566			$	38,391
Interest bearing deposits in banks		84,179				15,891				19,895
CDs in other banks		—				—				1,491
Investment securities		227,811				260,911				248,282
Loans held for sale		31,170				—				23,457
Construction & land development		35,745				34,486				17,358
Residential RE 1-4 family		44,796				42,811				20,362
Commercial real estate		698,404				724,165				709,889
Agriculture		109,819				116,963				103,977
Commercial and industrial		312,302				300,527				264,689
Business manager		60,080				41,075				5,215
Consumer and other		1,766				675				434
Portfolio loans		1,262,912				1,260,702				1,121,924
Deferred fees & costs		(1,774	)			(3,349	)			(3,329	)
Allowance for credit losses		(13,308	)			(17,640	)			(15,302	)
Loans, net		1,247,830				1,239,713				1,103,293
Non-marketable equity investments		11,291				11,198				9,971
Cash value of life insurance		13,113				13,005				12,693
Other real estate owned		—				—				978
Accrued interest and other assets		50,312				45,129				40,782
Total assets	$	1,697,196			$	1,617,413			$	1,499,233
LIABILITIES AND EQUITY
Non-interest bearing deposits	$	806,365			$	726,636			$	758,237
Interest checking		141,740				135,611				77,034
Savings		50,687				50,181				48,211
Money market		337,465				299,648				204,575
Certificates of deposits		167,346				172,510				170,204
Total deposits		1,503,603				1,384,586				1,258,261
Short-term borrowings		—				25,000				7,000
Long-term debt		—				9,901				38,125
Other liabilities		17,273				15,142				16,423
Total liabilities		1,520,876				1,434,629				1,319,809
Common stock		37,718				37,535				25,245
Retained earnings		161,030				157,900				168,508
Accumulated other comprehensive loss		(22,428	)			(12,651	)			(14,329	)
Shareholders' equity		176,320				182,784				179,424
Total liabilities and shareholders' equity	$	1,697,196			$	1,617,413			$	1,499,233

Consolidated Income Statement (unaudited)	Quarter ended:										Year to date:
(in thousands)	September 30, 2026				June 30, 2026			September 30, 2025			September 30, 2026			September 30, 2025
INTEREST INCOME:
Loan interest income	$	21,095			$	20,477		$	19,090		$	61,217		$	55,741
Investment income		2,406				2,345			2,398			6,817			8,875
Int. on fed funds & CDs in other banks		345				79			176			630			1,020
Dividends from non-marketable equity		158				90			365			598			638
Total interest income		24,004				22,991			22,029			69,262			66,274
INTEREST EXPENSE:
Int. on deposits		5,055				4,765			3,518			13,888			9,696
Int. on short-term borrowings		3				35			6			62			164
Int. on long-term debt		62				112			451			525			1,353
Total interest expense		5,120				4,912			3,975			14,475			11,213
Net interest income		18,884				18,079			18,054			54,787			55,061
PROVISION FOR CREDIT LOSSES		2,344				1,541			687			4,660			5,009
Net interest income after provision		16,540				16,538			17,367			50,127			50,052
NON-INTEREST INCOME:
Total deposit fee income		937				1,004			812			2,854			2,515
Debit / credit card interchange income		200				198			223			576			630
Merchant services income		2,716				2,905			3,210			8,139			17,683
Gain on sale of loans		136				1,366			361			2,442			2,068
Gain (loss) on sale of investments		(1	)			—			—			53			(243	)
Other operating income		1,296				501			832			2,307			1,604
Total non-interest income		5,284				5,974			5,438			16,371			24,257
NON-INTEREST EXPENSE:
Salaries & employee benefits		9,047				8,336			7,667			26,392			23,725
Occupancy expense		493				483			458			1,512			1,163
Merchant services operating expense		1,240				1,346			1,580			3,927			7,641
Professional fees		1,062				1,230			1,204			3,319			3,032
Data & technology expense		1,609				1,618			1,510			4,954			4,311
Other operating expense		2,064				1,948			1,854			6,373			6,636
Total non-interest expense		15,515				14,961			14,273			46,477			46,508
Income before provision for income tax		6,309				7,551			8,532			20,021			27,801
PROVISION FOR INCOME TAXES		1,693				2,074			2,296			5,344			7,431
Net income	$	4,616			$	5,477		$	6,236		$	14,677		$	20,370

        

ASSET QUALITY	September 30, 2026				June 30, 2026				September 30, 2025
(in thousands)
Delinquent accruing loans 30-60 days	$	6,295			$	2,675			$	6,210
Delinquent accruing loans 60-90 days		138				59				355
Delinquent accruing loans 90+ days		45				231				966
Total delinquent accruing loans	$	6,478			$	2,965			$	7,531
Loans on non-accrual	$	35,157			$	44,237			$	26,949
Other real estate owned		—				—				978
Nonperforming assets	$	35,157			$	44,237			$	27,927
Delinquent 30-60 / Total Loans		0.50	%			0.21	%			0.55	%
Delinquent 60-90 / Total Loans		0.01	%			—	%			0.03	%
Delinquent 90+ / Total Loans		—	%			0.02	%			0.09	%
Delinquent Loans / Total Loans		0.51	%			0.24	%			0.67	%
Non-accrual / Total Loans		2.78	%			3.51	%			2.40	%
Nonperforming assets to total assets		2.07	%			2.74	%			1.86	%
Year-to-date charge-off activity
Charge-offs	$	8,406			$	1,998			$	1,388
Recoveries		29				27				45
Net charge-offs (recoveries)	$	8,377			$	1,971			$	1,343
Annualized net loan losses to average loans		0.88	%			0.32	%			0.16	%
CREDIT LOSS RESERVE RATIOS:
Allowance for credit losses	$	13,308			$	17,640			$	15,302
Total loans	$	1,262,912			$	1,260,702			$	1,121,924
Purchased govt. guaranteed loans	$	2,023			$	2,144			$	14,970
Originated govt. guaranteed loans	$	57,488			$	60,868			$	42,641
ACL / Total loans		1.05	%			1.40	%			1.36	%
ACL / Loans less 100% govt. gte. loans (purchased)		1.06	%			1.40	%			1.38	%
ACL / Loans less all govt. guaranteed loans		1.11	%			1.47	%			1.44	%
ACL / Total assets		0.78	%			1.09	%			1.02	%
ACL / Nonperforming assets		37.85	%			39.88	%			54.79	%
ACL / Nonperforming assets (net of guarantees)		122.53	%			78.94	%			93.96	%

SELECT FINANCIAL TREND INFORMATION (in thousands)	For the Quarter Ended:
	September 30, 2026			June 30, 2026			March 31, 2026			December 31, 2025			September 30, 2025
BALANCE SHEET- PERIOD END
Total assets	$	1,697,196		$	1,617,413		$	1,573,506		$	1,581,522		$	1,499,233
Loans held for sale		31,170			—			18,328			—			23,457
Loans held for investment		1,262,912			1,260,702			1,210,334			1,196,424			1,121,924
Investment securities		227,811			260,911			252,955			240,997			248,282
Non-interest bearing deposits		806,365			726,636			740,014			786,249			758,237
Interest bearing deposits		697,238			657,950			600,931			557,400			500,024
Total deposits		1,503,603			1,384,586			1,340,945			1,343,649			1,258,261
Short-term borrowings		—			25,000			25,000			—			7,000
Long-term debt		—			9,901			9,896			38,153			38,125
Total equity		198,748			195,435			197,314			197,251			193,753
Accumulated other comprehensive loss		(22,428	)		(12,651	)		(14,472	)		(12,456	)		(14,329	)
Shareholders' equity		176,320			182,784			182,842			184,795			179,424
QUARTERLY INCOME STATEMENT
Interest income	$	24,004		$	22,991		$	22,266		$	22,420		$	22,029
Interest expense		5,120			4,912			4,443			4,338			3,975
Net interest income		18,884			18,079			17,823			18,082			18,054
Non-interest income		5,284			5,974			5,091			5,253			5,438
Gross revenue		24,168			24,053			22,914			23,335			23,492
Provision for credit losses		2,344			1,541			776			3,932			687
Non-interest expense		15,515			14,961			15,976			14,732			14,273
Net income before tax		6,309			7,551			6,162			4,671			8,532
Tax provision		1,693			2,074			1,577			1,458			2,296
Net income after tax		4,616			5,477			4,585			3,213			6,236
BALANCE SHEET- AVERAGE BALANCE
Total assets	$	1,670,909		$	1,624,113		$	1,557,814		$	1,569,615		$	1,480,234
Loans held for sale		5,282			24,214			315			292			1,190
Loans held for investment		1,277,633			1,252,046			1,215,806			1,190,626			1,120,353
Investment securities		250,267			252,879			240,666			245,335			251,213
Non-interest bearing deposits		790,892			751,008			745,288			785,452			751,139
Interest bearing deposits		669,658			659,153			583,419			532,365			493,430
Total deposits		1,460,550			1,410,161			1,328,707			1,317,817			1,244,569
Short-term borrowings		—			3,011			2,921			—			446
Long-term debt		6,997			9,899			23,397			38,153			38,107
Shareholders' equity		183,176			183,148			187,270			187,713			175,101

Contact: Steve Miller - President & CEO
Bhavneet Gill – EVP & CFO
(559) 439-0200

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were FFB Bancorp's third-quarter 2026 earnings?

FFB Bancorp earned $4.62 million, or $1.61 per diluted share, in third-quarter 2026. That compares with $5.48 million, or $1.88 per diluted share, in the previous quarter and $6.24 million, or $2.06 per diluted share, a year earlier. Results are unaudited.

What capital ratios did FFB Bancorp report for September 30, 2026?

FFB Bancorp's tangible common equity ratio was 10.39% at September 30, 2026. FFB Bank's regulatory leverage capital ratio was 11.55%, and its total risk-based capital ratio was 15.91%.

Why did FFB Bancorp's merchant services revenue decline in third-quarter 2026?

FFB attributed the year-over-year decline to lower ISO partner sponsorship volumes and pricing competition affecting FFB Payments. The sequential decline primarily reflected lower processing volumes and associated revenue at FFB Payments.